Current accounts: which banks are winning and losing customers?

Switching current accounts is big business. Since the Payment Council’s Current Account Switch Guarantee was launched last September, it’s been quicker and easier for customers to ditch their existing bank account and make tracks for a better one.

Winners and losers

But which current account providers are faring best under the initiative? Data from individual providers, published by the Payments Council, makes it easy to find out.

The table shows how many current account customers each bank/building society acquired and lost in the last three months of 2013 – in other words, just after the switching service kicked in.

This is separate from the general switching data issued by the Payments Council which doesn’t differentiate between banks.

Brand

Gains

Losses

Net gains

AIB Group (UK) - includes First Trust & Allied Irish Bank switches

125

1,104

-979

Bank of Ireland (UK) - includes Post Office switches

335

714

-379

Bank of Scotland

3,128

3,225

-97

Barclays

10,983

24,362

-13,379

Clydesdale Bank Includes Yorkshire Bank switches

1,110

7,897

-6,787

Co-operative - includes Smile brand switches

1,937

17,168

-15,231

Danske

505

827

-322

Halifax

66,401

20,069

46,332

HSBC - includes First Direct and M&S Bank switches

18,616

29,530

-10,914

Lloyds Bank - includes TSB prior to separation from Lloyds Banking Group

83,639

103,704

-20,065

Nationwide

21,667

8,988

12,679

NatWest

12,097

26,409

-14,312

RBS

2,136

9,950

-7,814

Santander

54,617

24,616

30,001

Ulster Bank

337

1,408

-1,071

Low value participants - includes Virgin Money & Cumberland BS

690

534

156

Without a total number of current account customers for each bank – and any more historic data – it’s difficult to get a true context. But we CAN get a good idea of the winners and losers by looking at the difference between those who dumped their current account during this period, compared to those who joined.

It’s also quite easy to work out why… Let’s take a look at the three biggest losers and winners.

Biggest losers

1. Co-operative Bank

The Co-op saw more than 17,000 current account customers pack their bags in the last quarter of 2013 and it welcomed less than 2,000. Little wonder. In reputational terms, the last 12 months for Co-op have been disastrous.

Financial difficulties following its acquisition of Britannia Building Society forced the Co-op Group mutual to sell off around 70% of Co-op Bank to hedge funds which do not adhere to its ethical principles.

This caused thousands of previously-loyal customers to jump ship. The situation was not helped by the sex and drugs scandal involving its then-chairman, the Reverend Paul Flowers.

2. NatWest

NatWest’s own data reports that it lost more than double the current account customers it gained (just under 26,500 compared to 12,000) during quarter four of last year.

However, the technical glitches that have blighted NatWest and its sister bank, RBS (which is listed separately in the figures but still didn’t fare well), are most likely to blame.

On two separate occasions either side of Christmas, customers of the banks were infuriated at not being able to use their debit cards, access cash from ATMs or pay for fuel at Tesco – and many obviously voted with their feet.

3. Barclays

Barclays is another bank that won’t be celebrating today’s figures, losing more than 24,000 current account customers in the last three months of 2013, while gaining little under 11,000.

But then the banking giant has been plagued by the ongoing PPI (Payment Protection Insurance) mis-selling scandal. Having just been forced to ring-fence another £900m to compensate customers who should never have been sold the cover, the bank’s total PPI bill now stands at a staggering £4.8bn.

Kevin Mountford, head of banking at MoneySuperMarket, said of the results: “It might not come as a surprise that the biggest losers are Co-op bank, Barclays and the RBS group – which have been hit by scandal, mis-selling investigations and IT crashes respectively. Customers are ditching big-name banks for challengers with hot offers – or just cleaner reputations.”

Biggest winners

1. Halifax

The figures told a very different story for Halifax, which welcomed an impressive 66,400 new current account customers in the final quarter of last year – more than three times the 20,000 who opted to leave.

Halifax has pulled out all the stops to attract new customers. It’s paying a £100 ‘thank you’ to customers who make a full switch to its Reward account, which also pays £5 a month interest if you stay in credit. That’s a tasty £160 in the first year.

2. Nationwide

The UK’s biggest mutual is proving to be ‘on your side’ with its data as well as its advertising, attracting almost 21,700 new current account customers compared to the 9,000 it lost.

But while it doesn’t offer an upfront switching incentive, the advertised 5% AER on its FlexDirect account has been turning heads. You’ll earn this rate – which beats ALL easy access savings accounts – on balances up to £2,500 for the first 12 months, falling to 1% thereafter.

3. Santander

Like Nationwide, Santander gained more than double the current account customers it lost at the tail end of last year (54,617 compared to 24,616). But then the bank’s well-publicised 123 account has been a huge hit with savers, paying interest up to 3% on balances between £3,000 and £20,000 – in addition to up to 3% cashback on household bills.

What’s more, Santander’s long-standing reputation for bad customer service is also improving. According to a poll of nearly 10,000 MoneySavingExpert users carried out in February, 63% described the service as ‘great’.

Please note: any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.